Demand Curve Shifts for Luxury Cars

Steps:

• Identify the demand curve as downward-sloping, showing inverse price-quantity relationship.
• Analyze factors shifting demand: income, tastes, substitutes, complements, expectations.
• For luxury cars, rising incomes increase demand, shifting curve rightward.
• Match diagram to shift direction and label.

Why D is correct:

• D shows rightward shift due to income elasticity >1 for luxuries, per Engel's law.

Why the others are wrong:

• A: Leftward shift implies income decrease, not luxury demand rise.
• B: Vertical line misrepresents elastic demand curve.
• C: Upward slope violates law of demand.

Not enough information on diagram details.

Final answer: D